Bad deal.

The worst mistake of the New Deal was keeping wages and prices artificially high, thus suppressing employment and consumer demand. UCLA economists Harold L. Cole and Lee E. Ohanian calculate that FDR’s pro-labor policies kept both wages and unemployment 25 percent above what they would have been otherwise. (The old saw was that the Depression wasn’t so bad—if you had a job.) “Salaries and prices fall when unemployment is high,” Ohanian has explained. “By artificially inflating both, the New Deal policies short-circuited the market’s self-correcting forces.”

Most analysts agree that World War II ended the Depression. The Left tries to appropriate the war for the New Deal by characterizing it as simply a public-works program writ large—as if global cataclysm, with millions killed, countries overrun by invading armies, and major cities reduced to rubble were just the thing we needed to get an economy moving again. During World War II, 12 million men were conscripted into the military, food was rationed, and people couldn’t buy consumer goods like cars and appliances. Suffice it to say, its utility as a model for economic recovery is quite limited.

FDR was a prodigious political talent, whose high spirits and well-chosen words inspired the public, and a man of great personal courage. He left his imprint forever on American government, for better or worse. He was an exceptional wartime leader. Much can be said in his favor—but he didn’t end the Great Depression. Barack Obama, take note.

via Do We Really Want Another New Deal? by Rich Lowry on National Review Online.

Read the whole thing. Especially appropriate today as we sort through the horror of the Stimulus.